about mortgages. we argued about that. one of the few differences. hank said i have another -- i can draw another $350. if obama okays it, i will ask for it. i asked the obama administration to okay it. they said we're not in charge, they're in charge. neither bush or obama frankly was ready to do it. the obama administration said only one person at time. i said they overestimated the number of presidents we then had in september. so we lost an opportunity. and i honestly believe that political science will study this. >> i think george bush was a great president in this period. and the way he -- he dealt with the fact that he -- he didn't

worry about the public sentiment. he was just determined to do what was right. and i do think that we had -- housing -- we could spend a lot of time talking about housing and finance. wasn't able to come up with a way to limit the amount of foreclose euros, although i do think that fannie and freddie did more than anything else that was done. i regret that. it eluded the obama administration also. but i think the level of -- as i look back at it now, despite some of the angst i felt in that transition, as i look back at it now, the policy continuity was extraordinary because president obama picked tim geithner, ben bernanke was still there. barney was still there. chris dodd was still there.

picked tim geithner. the capital stabilization programs need it. they had the programs they needed in place when they got there. they manageled him well. there was pressure -- no doubt there was pressure. because there's president from the place to get rid of what the other guys had just did. just disallow it. but they kept the programs. they managed that well. so that part. >> bush does deserve credit for defying some of his own laws and giving hank the men to do it. we have one difference of opinion. hank believed there was urgency to get some of the money auto. he wanted to wait for the second

tranche of money. the money had to go somewhere. somebody had to come up with the money. we could have forced the banks to take a bit more of a hit at that moment with the t.a.r.p. but that's where the transition fell through. there was others i have to be critical of secretary of hfrmt u.d., john donovan. we took a billion dollars of the t.a.r.p. money and say use that to believe the people who are long-term unemployed. i was frustrated that we try to give authority. >> let me ask one final question before we turn to the audience, the fed. how much has the -- or has the very public and contentious fight over who should secede ben bernanke, how much of that has hurt the fed, the country? >> the fed -- i remember when alan greenspan was chairman, i was kind of a dissenter from the

current census that everything he did was wonderful, although he did a very good job. i found myself being a defender of the fed. the moment -- it was the moment when this began to go sour. one reason we couldn't consolidate the authorities of regulation is you couldn't even give power to the fed taken away. they were the ones people would have gotten upset if you took it away. greenspan said we can't do some monetary policy without some insight. here's the moment. when it came out that aig, the recipient of $165 million in what looked like at the time of free money, though since been paid barks when it came out they had given large bonuses to people, the pitch forks were in the street. i feared a it that time we were going to lose a capacity for

coherent governor nance. the fed going back. that's when the fed got demonized. the fed -- they gave the money to the people and then they gave all of the bonuses. chris dodd got in trouble because he constitutionally tried to take it away retroactively. they said you can't take it away retroactively. they blamed him for the bonuses. the fed was weakened. they ber the major political blame unfairly. >> do you think the fed has been hurt by all of this? >> by -- >> be i the storm over who should replace ben bernanke? >> i agree with barney it's been accentuated by the fire of storm and unpopularity of the actions that we all had to take and the fed took, which were really unpopular and the american people never understood, never

understood. we did these preventive disasters. something barney and i could have understood we could have done something that rivalled the great depression. but barney was the first one that explained it to me. the first time i heard the word not being a law student, counterfactual. the bonuses were illegal. they were. the last thing to get to your specific question -- i hated -- i hate the political turmoil we've seen and the politics around the appointment of the next chairman of the fed. i don't like how it's handled. good people, larry summers is a good man.

he's highly regarded. he's faithful. janet yellen, outstanding. there are the key thing is, you know, we've got some good candidates. this is a very important decision. president obama has got to make. i always argued that one of the -- president bush made some very important decisions. i think picking ben bernanke was a very good one and very important one. i think this one is important. one of the things that bothers me about washington is sometimes if people disagree with you on policy, they go after you in other issues and personalize it and so on. >> one of the most distressing things about me is -- and i blame -- i'm critical of the feds. i go back and say, well, we hurt their feelings. what you've seen is the financial community. the investment people, the

bankers. the fed has been under unfair assault, irresponsible assault. people complaining when the fed step in with a swap to help europe from avoiding possession. and the role of the what's happening is the most id logical people, some on the left, more on the right, have now turned on the fed. i think the failure of the financial committee that knowles better to defend the fed on irresponsible attacks on an institution is very, very discouraging. it's coming back to hurt them. they think someone seles going do it. but they have the responsibility not to allow the fed to be attacked and i think damaged as it' been. >> you may be right. i agree with everything you said. but i wonder if right now the finance community speaking up for the fed would help or hurt them? >> in this case -- yes, here's what they say. this is i don't want to make big

public speeches. but they want to say yes congressman ex- here's your $5,000, but could you ease up on the fed? i want to return to the questions, here's the rules. you can ask a question -- a question ends in a question mark. no speeches. these guys make the speeches. wait for the mic. speak into it clearly. say who you are. this is on c-span and everything. and, again, keep your questions short. i have an ipad and there's some corporate members of the council of foreign relations may have a question. so can we get a mic in the front? a woman in the front? >> i work for the naval postgraduate school. i've been struggling since we fell apart to understand how it happened. i never studied economics. but the thing that puzzled me that no one was concerned as it

appeared that giving loans to people who had no money and that the assumption was they were going to have it for a few months or whatever. and then sell it and the price would go up, i thought was nuts. why didn't anybody raise that question? one -- here's what happened. 50 years ago, most people who borrowed money were going to have to pay back the person who lent it. and thanks to liquidity coming from nonbank sources and information technology, you were able to get to securitization. that's the one difference i have with the way they're administering the bill now. so people began to make loans, sell the loans, and not have any further responsibility. and the lender borrowed dis-palestinian slipped. now, one of the sub straits of that was supposed to be the rating agencies. no one has done a worse job in my memory. so that is essentially what happened. there was this -- people gave

loans that shouldn't have gotten loans because the worry they wouldn't be repaid was a problem. one of the things they put into the bill -- this is my one criticism of the administration's implementations, we put in a require for rich retention. if you made mortgages, the person who bought them up and securityized them, sold it to the general public had to retain some of the risk. to get 60 sloets in the senate, we had to agree to an exception to that. the regulators to my dismay, collapsed on the two categories. so some loans we banned, we did ban them. the other thing if you make a loan for mortgages, you don't have to have the risk retention.

>> ever since world war ii, the plethora of policies we've had in the u.s. the mortgage interest rate reduction, the fha, the program, va, all of the different -- have tended to promote homeownership. barney said you can have too much of a good thing. homeownership went up. all of the models didn't see a big drop in residential mortgages. if you were an investor and owned a mortgage, the biggest risk was not historically you wouldn't get your money back, you would get it back too soon. and then you what disappointed me in terms of dodd frank and the way that was watered down was that the regulators allowed this -- the exception if a mortgage was a qualified mortgage. and the new consumer finance protection bureau originally had

regulations that said the buyer had to be able to afford the home and put 20% down. okay? there's huge resistance. so affordability is important. but flexibility to pay, but willingness to pay is very important. and the only way you get to willingness to pay is the 20% down. even on that, it bowed to the political pressure. >> -- >> no. he was in joint pressure. i don't think it has to be a 20% down. there are other ways. >> something down. >> again, there was supposed to be three categories of mortgages. mortgages have it so bad you can't make them. that's in the mortgage. they're unenforceable. you can't make them. there's two others -- the average mortgage, risk retention. and then a small number of

mortgages. a couple of senators wanted it. the one thing about the filibuster rule, the 60-vote rule gives every senator a gun. you want 60, you're going to give me this. so what the regulators did -- you can see cfpb disappointed me on this. the coalition, the banks -- the poor people. i think the liberals -- i'm critical for this. hank is right. the only sol lace i have is statutory authority is still there. i hope they will reconsider that. >> go to the left and the one on the back. huge. >> right here. >> and the guy in the green. >> yeah. >> is there -- you mentioned earlier there's a lot to be done. is there or should there be a contingency plan in place to now very big chi niece banks that run into trouble? >> in --

>> he said could there be a contingency plan in case one of the big chinese banks fail. >> that would be very popular. >> like barney said, there are some things that are hard to plan for. and we did contingency planning as they do. i'm sure they do contingency planning stress tests for big global banks failing. and for cry seals starting other places. i maintained was not a u.s. financial crisis. but the u.s.-european. the banks had a big problem. they didn't deal with it the way they dealt with it. the effectiveness i think was better in terms of getting capitol. but, yes, i'm sure that regulators have contingency problems for things that happen globally.

but as barney said in answer to david's questions, we don't have control in terms of what foreign companies do. we just have to coordinate. >> can i ask a question. is it the case that it might be less likely given the fact that the chinese government would be less constrained by public opinion? if they could step in and stop the bleeding earlier and easier. >> oh, yeah. i didn't deal with the specific there. that's why i got a specific question, i dealt with it generally. i didn't want to get into specifically china. i'm not predicting that likelihood. i would say all over the world. the europeans were bailing out over lincoln. no one was noticing it. in the early days, the crisis didn't just start in the u.s. -- there's -- there historically

was much less political concern about -- about bailouts. and nevin the u.s., you know, if you -- that too big to fail became an issue -- step back. we've had crises for a long time. and regulate. most of them are manageable. okay? most of them are manageable. it was only when we didn't have the authority we needed than was just an extraordinary test that the american public was hurt. >> i'm bob winter. i've got two in a sense related questions. you spoke about the lack of criminality enforcement and i understand the positions you both enunciated. i wonder if you could address the same questions from the point of view of regulatory authority and the ability of the regulators to step in and to take action against individuals,

executives, and board members, who engaged in -- >> i do. that's -- very important. because they argued, oh, we can't -- the argument that we don't want to put another big company out of business is, a, valid, but, b, no excuse. they should go after individuals. going after individuals a deterrent. firing the company -- i don't know why. i've been here. i've been busy with the other stuff. the one factor to their defense. the community exchange commission are both previously underfunded. we gave the cs fbc a lot of authority. a partisan difference. when the republicans took over the house in 2010, they decided to underfund. the problem is that what they

tell me -- i'm just repeating it, is that if we begin to get tough on this people, they will litigate. and they have resources beyond what we have. and a couple of those case s ca sort of exhaust us. one of the things in the bill is give the sec the fiscal autonomy that the bank regulators have. we couldn't get it done. gentleman in the back, a woman in the front here. can you give the woman on the front the second row? >> i'm peter ackerman. since in 19 0, 70% of all mortgages were held by gses and 64.5% of the americans own their own home. and 65% of all americans own their homes. my question is to the two of you, what are we trying to end in the interim? there's been a savings and loan

crisis and what happened in 2008. what are we trying to accomplish as a country as a housing policy. >> that is the question, either one of us are there in the policy. peter, you heard me say that i've thought one of the most effective things we did which was necessary to get through the night was putting in the conservatorship. when when he did that, and i remember talking with barney right as we were doing that, and got no -- anything but support from him. and what we said, what i said is this is a time-out. we can't straighten this out right now in the middle of a crisis. but it never dawned on me because no one was saying, oh, this is a great system, you know? public support for private profit, etc., etc. just this is a great system. we all still got it.

right now because they're making money hand over fist and all that money is in the federal budget, the is adding to the deficit to deal with it. you have disincentives. it's got to be dealt with. i would say it will be dealt with. but the other thing is i would just say it's not just fannie and freddie. it's housing policy. why should someone get an interest rate deduction on a million dollar mortgage and a renter doesn't. >> if i was starting over again, i would not have the home mortgage interest deduction. unfortunately, its's built in as a legitimate vested interest. it's not just pulled out. we have a national policy treating renting that it's somehow -- i will give you a shocking example of that. "the new york times" business section a couple of weekings ago had one of the most outrageously

bigoted articles i've seen, isn't it terrible, all of the poor homeowners in areas with foreclose euronow have to put up with the renters in the neighborhood. you should go back and read this. renned renters are bad in the neighborhood. by all of the renters in manhattan. we need to move away from this. but here's the -- the reason we're not getting rild of fannie and freddie -- political science reasons. there's a brilliant solution in the german constitution after world war ii. people were worried about the instability of france and italy. you kept getting governments overthrown by coalitions of people who were anti. and the german constitution says this, you cannot in the parliament overturn a government. you cannot turn a government out unless that same resolution names the new government.

so it prevents a coalition of negativism from stopping me. a majority for getting rild of fannie and freddie. but not together on one version. there's a coker approach. a sort of puppy you can -- that's the problem. it's not the only example. if you have a two-step vote, we give it to the electoral college, it will win. you never get enough people together on the alternative. that's what fannie and fraeddy have to see here in july. >> i had the honor of serving as the attache in brussels and before that i served on the committee. my question there is international. what would you learn, what would you advise american policy makers today about american leadership in the financial institutions globally based on your experience. were there any good examples of cooperation? everyone knows the story about

the sfa. but some good things happened that weren't told and what have you learned about american leadership in the process? >> i will say this, read "on the blink." what happened, how it happened, when it happened. that story is told because i think the crisis in many ways, it brings out the worst in some people, but it bringings out the best in my people. -- many people. great developed nation and kpopgs in the way you work together. it's between the time lehman went down and we got the t.a.r.p. legislation, the republicans and democrats working together to stave off disaster. you also had -- this was not just the u.s. european banks were teetering. six different countries came into rescue their banks.

when the g-7 met and deal with that, that same weekend where we flip the capital and the banks, it came together with a -- with a multiple point proposal, which basically said we're going to stand behind, you know, all systemically important institutions.

he and i talk add lot. i told him we were going to do risk prevention. he went back to the eu running in to some resistance and said the meshes are going to do it. they did it. when i ran into resistance, i was able to say the eu did it. but there's been more together. but there's a great example of international cooperation now. immediate focus too much on the negative. i wish more people knew it.

that's the tax agreements coming forward. cuts to taxes the multinational ability to cut taxes to nobody. we had this problem. the financial people i have some tifrnss with them. the teenage moms of tworlsed parents. mommy won't let me do that, i'll go to daddies, he can do that. aisle go to england. they'll let me do that. i'll go to japan, they'll let me do that. i think just the on sichlt we have been a good influence. there's a lot less regulatory

arbitrage. >> hello. i am also having certaining in the asian station in the dc metro chapter. thank you for talking about housing. thank you for talking about the global financing system. i heard you talk about e.u. and i haven't heard us talk a lot about the u.s. and china. that's a lot of imbalance, a gap between our financing system and our financing system. we talk about too big to fail. the china economy system pays a lot on the foc. that's why -- >> okay, you have a question? >> my question is how to protect the american middle class homeownership from people with cash coming in and -- we have

gone from one extreme of not adequate oversight and creating a bubble in the crisis. now we seem to have to another extreme we only ask people to have 20% down and excellent credit scores after all of this crisi crisis. how do we make it easier for -- >> okay, it's -- >> have we made it too hard for people to buy a house? >> no. it's risk pretension. i think 20% might have been too much. 20% didn't mean you couldn't get a mortgage. it meant that you would have to -- whoever lent you that money to buy your home without a 20% downpayment had to believe that it was a good enough loan to retain 5% of the risk if you didn't pay it.

so this notion that there's risk retention. securitization didn't exist before that. securitization brought it forward in the '80s, it's in the '90s. we made it too hard, i think, to give away mortgages that shouldn't be given. >> sir? >> peopler balm bush, i have two questions that may relate. what do you think about the volcker rule and what do you think about the movement to make big banks smaller. >> i think you're going to see a volcker rule adopted very soon. it takes a lot of regulators. they were trying to accommodate the financial system. i think it will be a solid voiker rule. i don't think it will harm what goes on. the international -- the british are doing something similar with their ring fencing. that one will work.

they're making them smaller, as hank pointed out, we give them the power even by making them shrink in size or by reducing a functio function. but reducing them in principle. one reason, we spent two years asking bank of america and wells fargo and j.p. morgan, please, can you buy this bank. we didn't want to let it go. to some extent, they have a legitimate complaint. buying countrywide was ken lewis' own idea. we did pressure them to buy merrill-lynch and morgan chase to buy bear stearns. i don't think sides alone was the problem. anybody who thinks that the banks have a lot of political

clout didn't watch our legislation. every -- on every issue when there was a dispute between smaller banks and big banks, the smaller banks won. they -- we changed to insurance assessment so that the smaller banks could do better than the bigger banks. the smaller banks get preference in the cfpb. increased the insurance in general. i'm not persuaded that the size of the banks alone is the problem. >> president obama marked the anniversary of the financial crisis in a speech at the white house on friday. highlights the administration's economic policies. he began with brief comments about the shooting of the washington, d.c. navy yard.

>> ladies and gentlemen, the president of the united states. >> good afternoon, everybody. please have a seat. before i begin, let me say a few words about the tragedy that's unfolding not too far away from here at the washington navy yard. that's part of why our event today was delayed. i've been briefed by my team on

the occasion. we still don't know all of the factings. we know several people have been shot and some have been killed. so we're confronting yet another mass shooting. and today it happened on a military installation in our nation's capital. it's a shooting that targeted our military and civilian personne personnel. these were men and women going to work, doing their job, protecting all of us. they're patriots. and they know the dangers of serving abroad, but today they face the unimaginable violence that they wouldn't have expected here at home. so we offer a gratitude to the navy, local law enforcement, federal authorities, and the doctors who had skill and bravery. i made it clear i want the investigation to be seamless so

federal and local authorities are working together and as it goes forward, we'll do everything in our power to make sure whoever carried out this cowardly act is held responsible. we send our thoughts and prayers to all at the navy yard who have been touched by this tragedy. we thanked them for their service. we stand with the families of those who have been harmed. they're going need our love and support. and as we learn more about the courageous americans who died today, their lives, their families, their patriotism, we will honor their service to the nation. they helped to make great and obviously we're going be investigating thoroughly what happened. as we do so many of the shootings, sadly, that have happened. and do everything that we can to try to prevent them. now, in recent weeks, much of our attention has been focussed on the events in syria. the horrible use of chemical

weapons on innocent people, including children. the need for a firm response for the international community. and over the weekend, we took an important step in that direction towards moving syria's chemical weapons under international control so they can be destroyed. and we're not there. but if properly implemented, this agreement could end the threat these weapons pose, not only of the syrian people, but to the world. i want to be clear, even as we dealt with the situation in syria, we continue to focus on my number one priority since the day i took office. making sure we recover from the worst economic crisis of our lifetimes and rebuilding our economy so it works for everybod

everybody. everybody willing to work hard will get a chance to get ahead. five years ago this week that the economy rocked wall street. that sent the recession into a tailspin. it's hard to remember everything that happened in those months. but in the matter of a frightening few days and weeks, some of the largest investment banks in the tworld failled, stock markets plunged. banks stop lending to families and small businesses. our auto industry, the heart beat of american manufacturing was flat lining. by the time i took office, the economy was shrinking by an annual rate by more than 8%. our businesses were shedding 800,000 jobs each month. there was a perfect storm that would rob millions of americans jobs, homes, savings that they had worked a lifetime to built.

and it also laid bare the long erosion for the middle class that for more than a decade had to work harder and harder just to keep up. but most americans who have known economic hardship in the last couple of years, they don't think about the collapse of lehman brothers when they think about the recession. instead, they were called the day they got the gut punch of a pink slip. the day the bank took away their home. they got sick and didn't have health insurance. ohher the day they had to sit their daughter or son down and tell him or her they couldn't afford to send their child back to college the next semester. so those are the stories that guided everything that we've done. it's what in those earliest days in the crisis caused us to act so quickly through the recovery act to arrest the downward spiral and put a floor under the

fall. we put people to work repairing roads and bridges, to keep teachers in our classrooms. the first responders on the streets. we helped responsible homeowners modify their mortgage sollace that more could keep their hopes. we helped to jump start the flow of credit to help more small businesses keep their doors open. as we worked to stablize the economy and get it growing and creating jobs again, we pushed it back ginns the trends that had been battling the middle class for decades. we addressed the addiction to foreign oil. we put in place big rules on big bankings. rules we need to finalize by the end of the year to make sure that the job is done. and we put in new protections that cracked down on the worst practices of mortgage lenders and credit card companies. we also changed the tax code

that was too skewed in favor of the wealthiest americans. we locked in tax cuts for 98% of americans. we asked those at the top to pay a little bit more. if you add it all up, in the last 3 1/2 years, our businesses have added $ 7.5 million new jobs. the unemployment rate has come down. the housing market is healing. the financial system is safer. we sell more goods made in america in the rells of the world than ever before. we generate more renewable energy than ever before. we produce more natural gas than anybody. health care costs are growing at the slowest rate in 50 years and just now, millions of americans who were locked out because they have pre-existing kpns or sick and can't afford it, they're going to have a chance to buy

affordable health care on the private marketplace. we've cleared away from the financial crisis and we've begun to lay a new foundation for economic growth and promise perty. -- prosperity. and the personal lives. people have tightened their belts, shed debt, refocused on the things that really matter. ultimately the resilience and the grit of the american people make it happen. we should be proud of that. on this five-year anniversary, we should take note on how far we've come from where we were five years ago. but that ice not the end of the story. any middle-class family will tell you. we're not yet where we need to be. and that's what we've got to focus on. all of the remaining work that needs to be done to strengthen this economy.

we need to grow faster, good paying jobs, prosperity, we need more ladders of opportunity for people who are current ly poor but want to get to the middle class. ichb though our businesses are crating new jobs that have broken record profits. the top 1% of americans took home 20% of the nation's income last year while the average worker isn't seeing a raise at all. that understates the problems. most of the gains have gone to the top .10%. so in many ways, the trends that have taken hold in the past few decades of a winner take all economy, where a few do better and better while everybody else just treads water or loses ground, those trends have been made worse by the recession.

that's what we should be focused on. that's what i'm focussed on. i know the americans standing beside me and all of you out there are focused on. if congress begins another budget debate, that is what congress should be focussed on. how do we grow the economy faster. how do we create better jobs? do we increase wages and incomes? how do we inkrecrease opportunis who have been locked out of opportunity. that's what we're foe cushion on. the stakes for the middle class and everybody fighting to get to the middle class could not be higher. in today's hypercompetitive world, we have to make the investments to track good jobs, pay good wages, and offer high standards of living. and although ultimately our success will depend on all of the innovation and hard work of

our private sector, all of that grip and resilience of the american people, government is going to have a critical role. in making sure that we have an education system that prepares our children, our workers for a global economy. the budget congress passes will determine whether we can hire more workers to update our transportation and communications networks or funds the kind of research and development that kept america on the consulting edge. so what happened here in washington makes a difference. what happens here on capitol hill is going to help determine not only the pace of our growth, but also the quality of jobs, the quality of opportunity for this generation and future generations. the problem is, at the moment, republicans in congress don't seem to be focussed on how to grow the economy and build the

middle class. i say at the moment because i'm hoping a lightbulb goes off here. so far, the budget ideas revolve primarily around deeper cuts to education. even deeper cuts that would gut america's scientific research and development. even deeper cuts to america's infrastructure investment, our roads, bridges, schools, our energy grid. these aren't the policies that would grow the economy faster. they're not the policies that would help grow the middle class. in fact, they do the opposite. up until now, republicans have argued that these cuts are necessary in the name of fiscal responsibility.

but our deficits are now falling at the faesest rate since the end of world war ii. i want to repeat that. our deficits are going down faster than any time since before i was born. by the end of this year, [ applause ] by the end of this year, we will have cut our deficits by more than half since i took office. that doesn't mean that we don't still have some long-term fiscal challenges, primarily because the population is getting older. and they're using more health care services. and so we've still got some changes that we've got to make. and there's not a government agency or program out there that still can't be streamlined, become more customer friendly, more efficient. so i do believe we should cut our programs that we don't need.

we fleed to fix the ones that aren't working the way they're supposed to or outlived the initial mission. we've got make government more efficient and faster. that's not what's being proposed by the republican budgets. instead of making necessary changes to the scalpel, so far, at least, republicans have chosen to leave in place the so-called sequester cuts that have cost jobs, harmed growth, are hurting our military readiness. and top independent economists say this has been a big drag on a recovery this year. our economy is not growing as fast as it should, and we're not creating as many jobs as we should. because the sequester is in place. that's not my opinion. it's the opinion of independent

economists. if the republicans want the economy to grow faster, create more jobs faster, they should want to get rid of it. it's irresponsible to keep in place. if congress is serious about wanting to grow the economy faster and creating jobs faster, the first order of business must be to pass a sensible budget that replaces the sequester with a balanced plan that is both fiscally sound and fund the investments like education, basic research, and infrastructure that we need to grow. this is not asking too much.

the most fundamental job is passing a budget. without shutting down the government, or worse, not to pay this country's bills. after all of the progress we made in the last 4 1/2 years, the idea because of an unwillingness to compromise is the height of irresponsibility. it's not what the american people need right now. these folks standing behind me, these are people who are small business owners. people who almost lost their home. young people trying to get a college education. and all of this and in part because of the steps we took and primarily because of the courage and determination and hardwork, they're in a better place now. but the last thing they're

looking for is for us to go back to the same kind of crisis situations that we've had in the past. in the single most important thing we can do to prevent that -- for congress to pass a budget without drama that puts us on a sound path for growth, jobs, better wages, better incomes. look, it's never been easy to get 535 people here in washington to agree on anything. and the budget battles and debates, those are the result of the republic. it's even harder when you have divided government. and right now, you've got republicans controlling the house of representatives, democrats controlling the senate. the democrat in the white house. so this is always going to be tough. having said that, i cannot remember a time when one faction

of one party promises economic chaos if it can't get 100% of what it was. that has never happened before. but that's what's happening right now. you have some republicans in the house of representatives who were promising to shut down the government at the end of this month if they can't shut down the affordable care act. if that chemodoesn't work, they are suggesting they won't pay the bill that congress is running up, which would cause the americans to default on its debt for the first time in our history. and would create massive economic turmoil, interest rates on ordinary people which shoot up. those kinds of actions are the kinds of actions that we don't need. the last time the same crew ready this course of action in

2011, even the mayor's suggestion of -- merest suggestion would slow our economic growth. everybody remembers that. wasn't that long ago. now keep in mind, initially, the whole argument is we want to do this because we're going to reduce our debt. that doesn't seem to be the focus now. the focus is on obama care. let's put this in per sfektive. the affordable care act has been the law for 3 1/2 years now. it passed both houses of congress. the supreme court issued it unconstitutional. the candidate who called for repeal lost. they -- they failed every time. meanwhile, the laws have helped millions of americans.

young people were able to stay on their parents' plan up until the age of 26. seniors who are getting additional discounts on their prescription drugs. organized families and small businesses that are getting rebates from insurance companies because now insurance companies have to actually spend money on people's care instead of on administrative costs and c.e.o. bonuses. a lot of the horror stories that were predicted about how this is going to shoot rates way up, death panels, all of that stuff. none of that stuff happened. and in two weeks, the affordable care act is going to help millions of more people. there's no serious evidence that the lawn, which has helped to keep down the rise of health care costs to the lowest level

in 50 years is holding back economic growth. so repealing the affordable care act. making sure 34 million people don't get health insurance and people with pre-existing conditions continue to be locked out of the health insurance, that's not an agenda for economic growth. the number one priority of boosting growth and jobs in this country. not a serious economist. i understand i will never convince some republicans about the merits of obama care. i understand that. and i'm more than willing to work with them where they've got specific suggestions that they can show the health care system work better. remember, initially, this is like repeal and replace. and the replace thing is going off to the wayside.

now it's just repeal. but the larger point is after all that we've been through in the last five years, after all the work the americans like those standing behind me have done, to come back from the depths of the crisis, are some of these folks really sold beholden to one extreme wing of their party that they're willing to tank the entire economy? just because they can't get their way on this issue? are they really willing to hurt people just to score political points? >> i hope not. in case there's any confusion, i will not negotiate on whether or not america keeps its word and meets its obligations. i will not negotiate over the full faith and credit of the united states. this country has worked too hard for too long to dig out of a crisis just to see the elected

representatives here in washington purposely cause another crisis. but stop the threats, stop the political posturing, keep the government open, pay our bills on side, let's pass a budget, let's work together to do what the american people sent us here to do -- create jobs, grow our economy, expand our opportunity. that's what we need to do. >> as far as the budget goes, it's time for responsible republicans who share these goals. and there are a number of folks out there that i think are decent folks. i've got some -- tills agreements on some issues but i think want to see the economy grow. it's time for the republicans to

step up and they have to decide what they want to prior titz. originally, they said they wanted deficit reduction. as i said before, the deficits are falling fast. the only way to make further long-term progress on deficit reduction that doesn't slow growth is with a balanced plan that includes tax loopholes and benefit corporations and the wealthiest americans at the expense of the middle class. it's the only way to do it. they said they wanted entitlement reform. but the leaders haven't put forth serious ideas that wouldn't devastate social security. i put forward ideas for sensible reforms for medicare and social security and haven't gotten a lot of feedback yet. they wanted tax reform. remember, this is just a few months ago, they said, well, this is going to be one of the top priorities, tax reform.

six weeks ago, and simply fizs it for small business owners as long as we use some of the create good jobs and middle class folks who work in these businesses. my position is folks in this town want a grand bargain, how about a grand bargain for middle class jobs. i put forward ideas for tax reform. i haven't heard back from them yet. congress has a couple of weeks to get this done. if they're focused on what the american people are thinking about, faster growth, more jobs, better future for our kids, i'm confident it will happen. and once we're done with the budget, let's focus on the other things we know can make a

difference for other middle-class families. lowering the cost of college. finished the job of immigration reform. taking up the work of tax reform to make the system fairer and promoting more investment in the united states. if we follow the strategy i'm laying out for our entire economy and if washington will just act with the same urgency and common purpose that we felt five years ago, then our economy will be stronger. a year from now, five years from now, a decade from now. that's my priority. all of these folks standing behind me and everybody out there who's listening, that's my priority. i've run my last election. my only interest at this point is making sure that the economy is moving the way it needs to to have the broad based growth that's made the hallmark of this

country. i will spend every moment of every day that i have left and give everyone a chance to get ahead. thank you, everybody, god bless you. god bless america. [ applause ] >> in a few moments, a special program, first ladies, influence and image, focuses on helen taft. in an hour and a half, the discussion on the congressional agenda. after that, a look back at the 2008 financial crisis, with former treasury secretary henry